The Developers Strike Back

Larry Silverstein, responding to the latest offer by the Port Authority, et. al., will not go softly along with either new World Trade Center proposal. His spokesman (or one of his spokesmen) Howard Rubenstein issued a statement today:

“There are significant new elements, which differ substantially from prior negotiations. For example, we are concerned by provisions that would allow the Port Authority to walk away at any time from now until September if it feels that the demands it has made of other government entities, and that are completely out of Silverstein’s control, are not being met.”

One provision would hold developer Larry Silverstein, who owns the lease for the 16-acre site, in default if he fails to build all 5.9 million square feet of office space. While he would not lose control of the buildings, he would not be allowed to earn any profit or a development fee.

“It is an unusual provision and depending on its language, it could be a serious problem,” says Steven Spinola, the president of the Real Estate Board of New York.

Especially if Silverstein would be considered in default if he failed to build everything–10 million square feet–in the next six years. And where, exactly, are those 10 million square feet of tenants going to come from?